PEOPLE
Mozambique's major ethnic groups encompass numerous subgroups with diverse languages, dialects, cultures, and histories. Many are linked to similar ethnic groups living in neighboring countries. The north-central provinces of Zambezia and Nampula are the most populous, with about 45% of the population. The estimated 4 million Makua are the dominant group in the northern part of the country--the Sena and Ndau are prominent in the Zambezi valley, and the Tsonga and Shangaan dominate in southern Mozambique.

Despite the influence of Islamic coastal traders and European colonizers, the people of Mozambique have largely retained an indigenous culture based on small-scale agriculture. Mozambique's most highly developed art forms are wood sculpture, for which the Makonde in northern Mozambique are particularly renowned, and dance. The middle and upper classes continue to be heavily influenced by the Portuguese colonial and linguistic heritage.

During the colonial era, Christian missionaries were active in Mozambique, and many foreign clergy remain in the country. According to the national census, about 40% of the population is Christian, at least 20% is Muslim, and the remainder adheres to traditional beliefs.

Under the colonial regime, educational opportunities for black Mozambicans were limited, and 93% of that population was illiterate. In fact, most of today's political leaders were educated in missionary schools. After independence, the government placed a high priority on expanding education, which reduced the illiteracy rate to about two-thirds as primary school enrollment increased. Unfortunately, in recent years school construction and teacher training enrollments have not kept up with population increases. With post-war enrollments reaching all-time highs, the quality of education has suffered.

HISTORY
Mozambique's first inhabitants were San hunter and gatherers, ancestors of the Khoisani peoples. Between the first and fourth centuries AD, waves of Bantu-speaking peoples migrated from the north through the Zambezi River valley and then gradually into the plateau and coastal areas. The Bantu were farmers and ironworkers.

When Portuguese explorers reached Mozambique in 1498, Arab trading settlements had existed along the coast and outlying islands for several centuries. From about 1500, Portuguese trading posts and forts became regular ports of call on the new route to the east. Later, traders and prospectors penetrated the interior regions seeking gold and slaves. Although Portuguese influence gradually expanded, its power was limited and exercised through individual settlers who were granted extensive autonomy. As a result, investment lagged while Lisbon devoted itself to the more lucrative trade with India and the Far East and to the colonization of Brazil.

By the early 20th century the Portuguese had shifted the administration of much of the country to large private companies, controlled and financed mostly by the British, which established railroad lines to neighboring countries and supplied cheap--often forced--African labor to the mines and plantations of the nearby British colonies and South Africa. Because policies were designed to benefit white settlers and the Portuguese homeland, little attention was paid to Mozambique's national integration, its economic infrastructure, or the skills of its population.

After World War II, while many European nations were granting independence to their colonies, Portugal clung to the concept that Mozambique and other Portuguese possessions were overseas provinces of the mother country, and emigration to the colonies soared. Mozambique's Portuguese population at the time of independence was about 250,000. The drive for Mozambican independence developed apace, and in 1962 several anti-colonial political groups formed the Front for the Liberation of Mozambique (FRELIMO), which initiated an armed campaign against Portuguese colonial rule in September 1964. After 10 years of sporadic warfare and major political changes in Portugal, Mozambique became independent on June 25, 1975.

The last 30 years of Mozambique's history have reflected political developments elsewhere in the 20th century. Following the April 1974 coup in Lisbon, Portuguese colonialism collapsed. In Mozambique, the military decision to withdraw occurred within the context of a decade of armed anti-colonial struggle, initially led by American-educated Eduardo Mondlane, who was assassinated in 1969. When independence was achieved in 1975, the leaders of FRELIMO's military campaign rapidly established a one-party state allied to the Soviet bloc and outlawed rival political activity. FRELIMO eliminated political pluralism, religious educational institutions, and the role of traditional authorities.

The new government gave shelter and support to South African (ANC) and Zimbabwean (ZANU) liberation movements while the governments of first Rhodesia and later apartheid South Africa fostered and financed an armed rebel movement in central Mozambique called the Mozambican National Resistance (RENAMO). Civil war, sabotage from neighboring states, and economic collapse characterized the first decade of Mozambican independence. Also marking this period were the mass exodus of Portuguese nationals, weak infrastructure, nationalization, and economic mismanagement. During most of the civil war, the government was unable to exercise effective control outside of urban areas, many of which were cut off from the capital. An estimated 1 million Mozambicans perished during the civil war, 1.7 million took refuge in neighboring states, and several million more were internally displaced. In the third FRELIMO party congress in 1983, President Samora Machel conceded the failure of socialism and the need for major political and economic reforms. He died, along with several advisers, in a suspicious 1986 plane crash.

His successor, Joaquim Chissano, continued the reforms and began peace talks with RENAMO. The new constitution enacted in 1990 provided for a multi-party political system, market-based economy, and free elections. The civil war ended in October 1992 with the Rome General Peace Accords. Under supervision of the ONUMOZ peacekeeping force of the United Nations, peace returned to Mozambique.

By mid-1995 the more than 1.7 million Mozambican refugees who had sought asylum in neighboring Malawi, Zimbabwe, Swaziland, Zambia, Tanzania, and South Africa as a result of war and drought had returned, as part of the largest repatriation witnessed in Sub-Saharan Africa. Additionally, a further estimated 4 million internally displaced people returned to their areas of origin.

GOVERNMENT AND POLITICAL CONDITIONS
Mozambique is a multi-party democracy under the 1990 constitution. The executive branch comprises a president, prime minister, and Council of Ministers. There is a National Assembly and municipal assemblies. The judiciary comprises a Supreme Court and provincial, district, and municipal courts. Suffrage is universal at 18.

In 1994 the country held its first democratic elections. Joaquim Chissano was elected President with 53% of the vote, and a 250-member National Assembly was voted in with 129 FRELIMO deputies, 112 RENAMO deputies, and 9 representatives of three smaller parties that formed the Democratic Union (UD). Since its formation in 1994, the National Assembly has made some progress in becoming a body increasingly more independent of the executive. By 1999, more than one-half (53%) of the legislation passed originated in the Assembly.

After some delays, in 1998 the country held its first local elections to provide for local representation and some budgetary authority at the municipal level. The principal opposition party, RENAMO, boycotted the local elections, citing flaws in the registration process. Independent slates contested the elections and won seats in municipal assemblies. Turnout was very low.

In the aftermath of the 1998 local elections, the government resolved to make more accommodations to the opposition's procedural concerns for the second round of multiparty national elections in 1999. Working through the National Assembly, the electoral law was rewritten and passed by consensus in December 1998. Financed largely by international donors, a very successful voter registration was conducted from July to September 1999, providing voter registration cards to 85% of the potential electorate (more than 7 million voters).

The second general elections were held December 3-5, 1999, with high voter turnout. International and domestic observers agreed that the voting process was well organized and went smoothly. Both the opposition and observers subsequently cited flaws in the tabulation process that, had they not occurred, might have changed the outcome. In the end, however, international and domestic observers concluded that the close result of the vote reflected the will of the people.

President Chissano won the presidency with a margin of 4% points over the RENAMO-Electoral Union coalition candidate, Afonso Dhlakama, and began his 5-year term in January 2000. FRELIMO increased its majority in the National Assembly with 133 out of 250 seats. RENAMO-UE coalition won 116 seats, one went independent, and no third parties are represented.

The opposition coalition did not accept the National Election Commission's results of the presidential vote and filed a formal complaint to the Supreme Court. One month after the voting, the court dismissed the opposition's challenge and validated the election results. The opposition did not file a complaint about the results of the legislative vote.

The second local elections, involving 33 municipalities with some 2.4 million registered voters, took place in November 2003. This was the first time that FRELIMO, RENAMO-UE, and independent parties competed without significant boycotts. The 24% turnout was well above the 15% turnout in the first municipal elections. FRELIMO won 28 mayoral positions and the majority in 29 municipal assemblies, while RENAMO won 5 mayoral positions and the majority in 4 municipal assemblies. The voting was conducted in an orderly fashion without violent incidents. However, the period immediately after the elections was marked by objections about voter and candidate registration and vote tabulation, as well as calls for greater transparency.

In May 2004, the government approved a new general elections law that contained innovations based on the experience of the 2003 municipal elections.

The third general elections occurred on December 1-2, 2004. FRELIMO candidate Armando Guebuza won with 64% of the popular vote. His opponent, Afonso Dhlakama of RENAMO, received 32% of the popular vote. The estimated 44% turnout was well below the almost 70% turnout in the 1999 general elections. FRELIMO won 160 seats in Parliament. A coalition of RENAMO and several small parties won the 90 remaining seats. Armando Guebuza was inaugurated as the President of Mozambique on February 2, 2005. The government has scheduled provincial and municipal elections in 2008, and presidential and parliamentary elections in 2009.

Mozambique maintains an embassy in the United States at 1525 New Hampshire Avenue, NW, Washington, DC 20036; tel: 202-293-7146; fax: 202-835-0245.

ECONOMY

Macroeconomic Review

Alleviating poverty. At the end of the civil war in 1992, Mozambique ranked among the poorest countries in the world. It still ranks among the least developed nations with very low socioeconomic indicators. In the last decade, however, Mozambique has experienced a notable economic recovery. Per capita GDP in 2006 was estimated at U.S. $320, a significant increase over the mid-1980s level of U.S. $120. With high foreign debt and a good track record on economic reform, Mozambique was the first African nation and sixth country worldwide to qualify for debt relief under the World Bank and International Monetary Fund (IMF) initial HIPC (Heavily Indebted Poor Countries) Initiative. In April 2000, Mozambique qualified for the Enhanced HIPC program and reached its completion point in September 2001. This led to the Paris Club members agreeing in November 2001 to substantially reduce the remaining bilateral debt, resulting in the complete forgiveness of a considerable volume of bilateral debt. The United States already finished the process and has forgiven Mozambique's debt.

During their summit in Scotland in July 2005, the G8 nations agreed to significant multilateral debt relief for the world's least developed nations. On December 21, 2005, the IMF formalized the complete cancellation of all Mozambican IMF debt contracted prior to January 1, 2005, worth U.S. $153 million.

Rebounding growth. The resettlement of civil war refugees, political stability and continuing economic reforms have led to a high economic growth rate. Between 1994 and 2006, average annual GDP growth was approximately 8%. Mozambique achieved this growth rate even though the devastating floods of 2000 slowed GDP growth to 2.1%. The World Bank is predicting average growth of 7% through 2008. Future strong expansion requires continued economic reforms, major foreign direct investment, and the resurrection of the agriculture, transportation and tourism sectors. Focusing on economic growth in the agricultural sector is a major challenge for the government. Although more than 80% of the population engages in small-scale agriculture, the sector suffers from inadequate infrastructure, commercial networks and investment. However a majority of Mozambique's arable land is still uncultivated, leaving room for considerable growth.

Low inflation. The government's tight control of spending and the money supply, combined with financial sector reform, successfully reduced inflation from 70% in 1994 to less than 5% in 1998-1999. Economic disruptions resulting from the devastating floods of 2000 caused inflation to jump to 12.7% that year. The government is still working to bring inflation down to those lower numbers. In 2004 inflation was 9.1%; in 2005 it climbed to 11.2%; in 2006 it dropped back down to 9.4%. As of March 2007, the floating exchange rate was approximately 26 meticais per dollar. (Note: In July 2006 the government revised its currency, dropping three zeros. Thus a coin formerly worth 1,000 meticais was from then on worth only one metical. And thus, where a dollar previously had been worth, for example, 26,000 meticais, it was from July onward worth 26.)

Extensive economic reform. Economic reform has been extensive. More than 1,200 state-owned enterprises (mostly small) have been privatized. Preparations for privatization and/or sector liberalization are underway for the remaining parastatals, including telecommunications, electricity, ports, and the railroads. The government frequently selects a strategic foreign investor when privatizing a parastatal. Additionally, customs duties have been reduced, and customs management has been streamlined and reformed. The government introduced a value-added tax in 1999 as part of its efforts to increase domestic revenues.

Improving trade imbalance. In 2006 Mozambique exported U.S. $2.43 billion worth of goods and imported U.S. $2.82 billion worth of goods. Support programs provided by foreign donors and private financing of foreign direct investment mega-projects and their associated raw materials have largely compensated for balance-of-payment shortfalls. The medium-term outlook for exports is encouraging, as a number of recent foreign investment projects have improved the trade balance. This export growth is expected to continue. MOZAL I, a large aluminum smelter that commenced production in mid-2000, greatly expanded Mozambique's trade volume. In April 2001, the International Finance Corporation (IFC) approved financing assistance for MOZAL II, which doubled overall production capacity. Phase two went online in April 2003, five months ahead of schedule, using primarily Mozambican workers during construction. Traditional Mozambican exports include cashews, shrimp, fish, copra, sugar, cotton, tea and citrus and exotic fruits. Most of these industries are being rehabilitated. In addition, Mozambique is less dependent upon imports for basic food and manufactured goods as the result of steady increases in local production.

SADC trade protocol. In December 1999, the Mozambican Council of Ministers approved the Southern African Development Community (SADC) Trade Protocol. The Protocol will create a free trade zone among more than 200 million consumers in the SADC region. Implementation of the Protocol began in 2002 and has an overall zero-tariff target set for 2008; however, Mozambique's country-specific zero-tariff goal is currently 2015. Mozambique joined the World Trade Organization (WTO) on August 26, 1995.

FOREIGN RELATIONS
While allegiances dating back to the liberation struggle remain relevant, Mozambique's foreign policy has become increasingly pragmatic. The twin pillars of Mozambique's foreign policy are maintenance of good relations with its neighbors and maintenance and expansion of ties to development partners.

During the 1970s and early 1980s, Mozambique's foreign policy was inextricably linked to the struggles for majority rule in Rhodesia and South Africa, as well as superpower competition and the Cold War. Mozambique's decision to enforce UN sanctions against Rhodesia and deny that country access to the sea led Ian Smith's regime to undertake overt and covert actions to destabilize the country, including sponsoring the rebel group RENAMO. After the change of government in Zimbabwe in 1980, the apartheid regime in South Africa continued to finance the destabilization of Mozambique.

The 1984 Nkomati Accord, while failing in its goal of ending South African support to RENAMO, opened initial diplomatic contacts between the Mozambican and South African Governments. This process gained momentum with South Africa's elimination of apartheid, which culminated in the establishment of full diplomatic relations in October 1993. While relations with neighboring Zimbabwe, Malawi, Zambia, and Tanzania show occasional strains, Mozambique's ties to these countries remain strong.

In the years immediately following its independence, Mozambique benefited from considerable assistance from some western countries, notably the Scandinavians. Moscow and its allies, however, became Mozambique's primary economic, military, and political supporters and its foreign policy reflected this linkage. This began to change in 1983; in 1984 Mozambique joined the World Bank and International Monetary Fund. Western aid quickly replaced Soviet support, with the Scandinavians, the United States, the Netherlands, and the European Union becoming increasingly important sources of development assistance. Italy also maintains a profile in Mozambique as a result of its key role during the peace process. Relations with Portugal, the former colonial power, are complex and of some importance as Portuguese investors play a visible role in Mozambique's economy.

Mozambique is a member of the Non-Aligned Movement and ranks among the moderate members of the African Bloc in the United Nations and other international organizations. Mozambique also belongs to the Organization of African Unity/African Union and the Southern African Development Community. In 1994, the government became a full member of the Organization of the Islamic Conference, in part to broaden its base of international support but also to please the country's sizeable Muslim population. Similarly, in early 1996 Mozambique joined its Anglophone neighbors in the Commonwealth. In the same year, Mozambique became a founding member and the first President of the Community of Portuguese Language Countries (CPLP), and maintains close ties with other Lusophone states.

U.S.-MOZAMBICAN RELATIONS
Relations between the United States and Mozambique are good and steadily improving. By 1993, U.S. aid to Mozambique was prominent, due in part to significant emergency food assistance in the wake of the 1991-93 southern African drought, but more importantly in support of the peace and reconciliation process. During the process leading up to elections in October 1994, the United States served as a significant financier and member of the most important commissions established to monitor implementation of the Rome General Peace Accords. The United States is the largest bilateral donor to the country and plays a leading role in donor efforts to assist Mozambique.

The U.S. Embassy opened in Maputo on November 8, 1975, and the first American ambassador arrived in March 1976. In that same year, the United States extended a $10 million grant to the Government of Mozambique to help compensate for the economic costs of enforcing sanctions against Rhodesia. In 1977, however, largely motivated by a concern with human rights violations, the U.S. Congress prohibited the provision of development aid to Mozambique without a presidential certification that such aid would be in the foreign policy interests of the United States. Relations hit a nadir in March 1981, when the Government of Mozambique expelled four members of the U.S. Embassy staff. In response, the United States suspended plans to provide development aid and to name a new ambassador to Mozambique. Relations between the two countries languished in a climate of stagnation and mutual suspicion.

Contacts between the two countries continued in the early 1980s as part of the U.S. administration's conflict resolution efforts in the region. In late 1983, a new U.S. ambassador arrived in Maputo, and the first Mozambican envoy to the United States arrived in Washington, signaling a thaw in the bilateral relationship. The United States subsequently responded to Mozambique's economic reform and drift away from Moscow's embrace by initiating an aid program in 1984. President Samora Machel paid a symbolically important official working visit to the United States in 1985, where he met President Reagan. After that meeting, a full U.S. Agency for International Development (USAID) mission was established, and significant assistance for economic reform efforts began. President Chissano met with President Bush in September 2003; previously, he had met with Presidents Reagan (October 1987), Bush (March 1990), and Clinton (November 1998), and also with Secretaries of State Powell (February 2002) and Baker (July 1992). Since taking office in February 2005, President Guebuza has visited the United States on five occasions. In June 2005, President Guebuza visited Washington, DC to take part in President Bush's mini-summit on Africa, along with the leaders of Ghana, Namibia, Botswana, and Niger. Later that month, he attended the Corporate Council on Africa (CCA) Business Summit in Baltimore. President Guebuza returned in September 2005 for the UN General Assembly in New York and in December 2005 attended the Fourth Development Cooperation Forum at the Carter Center in Atlanta. In 2006 he visited New York for the UN General Assembly, and in 2007 he visited Washington, DC for the signing of Mozambique's Millennium Challenge Corporation compact.

Security Information
The security situation in Mozambique requires caution. Street crime and carjackings in urban areas occur frequently. Road travel can be hazardous and should not be undertaken after daylight hours. The abundance of weapons remaining from the country's civil war and police who are poorly trained, equipped, and motivated contribute to a serious crime situation.

Additionally, several hundred thousand mines were planted throughout Mozambique during the last three decades of conflict. Although mine clearing operations are underway, surface travel off main highways should be approached with caution.

Before visiting Mozambique, consult the Country Specific Information for it. Visit the Consular Section of the embassy after arrival for security updates and to register.

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